Funded Status of U.S. Pensions Rises in January

February 9, 2012 ( – U.S. corporate pension plans saw a 1.7% increase in January, reported BNY Mellon Asset Management. 

The strong start to the year from stocks drove the funded status of the typical plan to 74.1%, according to the BNY Mellon Pension Summary Report for January 2012.

Assets for the typical plan in January increased 3.4%, offsetting a 1.1% increase in liabilities, BNY Mellon said. The rise in liabilities was due to tightening Aa corporate bond spreads, resulting in a six-basis-point decline in the Aa corporate discount rate to 4.3%, according to the report.

“The choppy recovery for pension plans continues, as the funded status has risen from the nadir of 70.1% at the end of September 2011,” said Jeffrey B. Saef, managing director, BNY Mellon Asset Management, and head of the BNY Mellon Investment Strategy & Solutions Group (a division of The Bank of New York Mellon). “This improvement has been largely due to the rally in equities, which has boosted asset values, as low interest rates have continued to prop up liabilities.”